In a prior blog, I surmised that Virginia local governments would have budgetary issues due to the current pandemic. Tax revenue shortfalls will likely continue into budgets for the next fiscal year and beyond for each local government. Indeed, the City of Richmond is looking at a shortfall in its next fiscal year. See Richmond officials projecting $37.5M revenue shortfall for 2021-2022 budget. While this example is anecdotal, it is not difficult to predict that other Virginia local governments will have the same issues. How a shortfall and the need for tax revenue affects taxpayers is unknown and will vary from locality to locality. If you or your business is audited by a Virginia local government, you should not hesitate to acquire legal counsel to ensure that the tax laws are correctly enforced and the auditor is not overly aggressive with these laws.
Christian Tennant is a Virginia tax attorney and former employee of the Virginia Department of Taxation. Mr. Tennant regularly speaks and writes on Virginia taxation. In his private practice he advises and represents businesses and individuals on a range of tax matters.